BDS market development guide.pdf - PACA

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CHAPTER ONE
WHY BDS MARKET DEVELOPMENT?
WHY IT IS IMPORTANT AND WHAT IS NEW ABOUT IT
Previously, we saw business development services (BDS) as a small, leftover bundle of activities
to be filled primarily by government—the kind of services we thought businesses needed even if
they did not know it themselves. Now we know that a broad range of services is increasingly
important in every economy and that such services are best offered in a business-oriented
manner within the context of functioning markets. Most previous interventions have actually
undermined the development of these markets. Difficult though it may be to accept, we have often
made things worse. Learning from past mistakes, we now focus interventions on helping markets
work more effectively.
This chapter provides a rationale for BDS market development interventions. It summarizes key
reasons for the growth of services globally and outlines the main conclusions reached by
development agencies through intensive review of their own experience supporting BDS in recent
years. It concludes by highlighting the key differences between BDS market development and
previous approaches with regard to the beliefs that underpin BDS, its definition, objectives, and
overall approach.
Key Questions:
1. Why is BDS so important for private-sector development, especially the development of small
and medium-sized enterprises (SMEs)?
2. Even if BDS is important, why should we think of BDS market development?
3. Given that BDS market development is important, what is so new about it in relation to how
we have done things in the past?
WHY BDS FOR SMES?
Common Starting Point
BDS market development—as with all interventions supported with aid—needs to be
justified with respect to its ability to reduce poverty. Before looking at BDS in depth, we
need to set out clearly the common starting point for this link between poverty and BDS. In
brief, this is based on a mainstream view of development articulated most coherently by the
World Bank but, with minor reservations from some, espoused by all major bilateral
agencies. The starting point essentially is built on the following core tenets:
• Poverty, although complex, is primarily about people’s lack of access to and limited
capacity to respond to income-earning opportunities.
Chapter One—Why BDS Market Development?
Why It Is Important and What Is New about It